Microsoft has issued a strong accusation against Google, alleging that the search giant is quietly leading a campaign to influence European competition authorities and damage Microsoft’s reputation in the cloud industry. In a blog post, Rima Alaily, Microsoft’s deputy general counsel, points to the upcoming launch of the Open Cloud Coalition in Europe as evidence of Google’s supposed tactics. Microsoft claims that Google is orchestrating this coalition, using smaller European cloud providers as a facade to disguise its involvement. According to Alaily, Google is positioning itself in a way that disguises its true motives, using smaller companies as a front in an “astroturf” effort to sway regulatory scrutiny.
Microsoft argues that this tactic is not new, referencing a similar incident with CISPE (Cloud Infrastructure Services Providers in Europe) earlier this year. According to Microsoft, when CISPE was close to resolving an ongoing dispute with them, Google allegedly offered CISPE members $500 million to reject the settlement and keep the litigation alive. CISPE declined, choosing to move forward with Microsoft instead. Microsoft suggests that Google’s actions are part of a larger strategy to deflect attention from its own regulatory troubles. With Google currently facing around 24 antitrust investigations globally, Microsoft believes Google is attempting to weaken rivals like Microsoft Azure to fortify Google Cloud Platform’s standing in the market.
Specific grievances were also raised by Microsoft. One recent example involves Google publicly filing a complaint with the European Commission about Microsoft’s cloud software licensing fees, which Google claims are unfairly restrictive and costly. Microsoft contends that Google’s perspective is skewed, analogizing it to a streaming service that has to pay licensing fees for content regardless of other access users may have. Microsoft insists that Google, despite its claims of being a smaller player, is anything but, given its extensive data centers and substantial growth fueled by billions in infrastructure investments.
Microsoft also accuses Google of employing “shadowy” lobbying practices. According to Microsoft, Google allegedly funds academics and commentators to publish negative articles about Microsoft. These commentators are often only revealed to have ties to Google when prompted by Microsoft, undermining authentic expert perspectives in favor of Google’s interests. Microsoft further claims that Google has a history of attempting to initiate negative narratives about Microsoft’s business operations, including its cybersecurity practices and operations in China.
Microsoft emphasizes its commitment to “credibility” in its regulatory approach. It points to examples of cooperation with regulators, such as modifying its productivity suite offerings to exclude Microsoft Teams following feedback from the European Commission. Microsoft underscores its willingness to engage transparently and adapt business practices to address genuine regulatory concerns.
The intensifying rivalry between Microsoft and Google has significant implications for the cloud industry and its customers. If Google’s alleged tactics succeed, Microsoft argues that smaller cloud providers and their customers could suffer due to fewer competitive options and possibly higher costs. However, Microsoft faces a risk if its claims against Google are ultimately unfounded. Accusations without solid evidence could damage Microsoft’s own standing with regulators, and it could be perceived as overly defensive, potentially leading to greater regulatory scrutiny of Microsoft’s cloud practices.
At its core, the dispute underscores a broader debate about fair competition. Both companies, despite their disagreements, publicly advocate for a level playing field in the tech sector. This latest conflict, however, raises questions about how far each is willing to go to secure their market position. The outcome of this standoff could influence the future direction of cloud regulation and reshape competition dynamics in the industry.
